Tether and Binance in the spotlight: An in-depth look at cryptocurrency regulatory issues
In a recent interview with Thinking Crypto’s Tony, the Blockchain Association’s Ron Hammond shed light on the evolving dynamics between Binance, Tether, and regulators in Washington DC. The conversation primarily focused on the recent agreement between Binance and the Department of Justice (DOJ) and ongoing concerns surrounding Tether.
DOJ’s Agreement with Binance: A Turning Point?
Hammond emphasized that historically Binance has faced reputational issues in DC, leading to increased scrutiny. This was evident in a letter sent to the DOJ by politicians French Hill and Senator Cynthia Lummis, specifically addressing concerns about Binance and Tether. However, an important development came as Binance reached a settlement with the DOJ, with Binance CEO Changpeng Zhao (CZ) resigning.
The discussion then turned to whether this agreement solves all the fundamental problems. Hammond spoke about the complexity of the situation, emphasizing DOJ’s concerns about money laundering and sanctions violations. He pointed out that these challenges are not limited to Binance, but are also relevant to Tether.
Tether’s continued challenges and reputation
According to Hammond, Tether was viewed negatively in DC, primarily due to issues related to audits and reserves. Despite Tether’s recent efforts to address these issues, doubts remain about using platforms like Tron and Binance to fund particularly malicious activities.
Hammond said: “Tether has always been viewed negatively, at least in DC, and I would say this is the last of the two big disruptors at the moment. At least for Tether, the biggest concerns usually start with audit and reserve issues. For some time, it has been unclear what creates reserves in Tether.”
The interview also highlighted concerns among industry-friendly Republicans about negative connotations associated with Tether. Despite efforts to correct past mistakes, especially after the Binance agreement, Tether continues to be under scrutiny. The conversation also touched on the importance of stringent know-your-customer (KYC) and anti-money laundering (AML) practices, which Binance has previously been accused of lax enforcement by the Department of Justice (DOJ).